Monday, April 28, 2014

During
the great 2007-2008 financial crisis the shares of asset manager / investment
dealer Canaccord Genuity Group Inc (CF) peaked
at $27.50 in mid 2006 and bottomed at $2.87 in mid 2008. During the same crisis
the shares of asset manager / investment dealer GMP Capital Inc. (GMP) peaked
at $28.75 in mid 2006 and bottomed at $3.03 in mid 2008. In both examples these
were stunning losses - in the order of 90%

The
experienced technical analyst (the older guys) will track the asset managers or
financial related issuers because they tend the broader equity markets. Also in
Canada
we had the August 2007 failure of Coventree Inc. and the Dundee Bank ABCP 2007
panic. In the U.S. we had
the March 2007 collapse of New Century Financial Corporation, an obscure real
estate investment trust that originated mortgage loans in the United States
through its operating subsidiaries. In a publication dated February 13, 2007, cycle expert
Ian Notley predicted "Mortgage Lenders / Financials: Cyclic tops and bears
are originating."

Our chart today is that of Canaccord plotted above GMP
Capital (weekly data) clearly displaying breakouts up and out of symmetrical
triangles – note also the 5-wave count in the triangle – a bullish sign for the
broader equity markets

Wednesday, April 23, 2014

Did
you miss the recent rebound in the TSX energy sector? The Shares S&P/TSX
Capped Energy Index Fund (XEG) is a basket of 53 stocks related to the energy
sector to include the oily producers, the gassy producers, the oil field
service companies and the integrated producer / refiners. The oil field service
companies (Energy Equipment & Services) is only 7.28% of the sector by
weight – but no energy bull ran run without participation from this group as
listed below

Calfrac
Well Services LtdCFW

Canadian
Energy Services CEU

Enerflex
Ltd.EFX

Ensign
Energy Services IncESI

Mullen
Group Ltd.MTL

Pason
Systems IncPSI

Precision
Drilling CorporationPD

Savanna
Energy Services SVY

Secure
Energy Services Inc.SES

ShawCor
LtdSCL

Trican
Well Service Ltd TCW

Trinidad Drilling Ltd.TDG

Note
that CFW, PSI, PD, SES and TDG have just printed new 52 week highs

The
chart displays two laggards in the oil field service companies group - Savanna
Energy Services (SVY) and Trican Well Service Ltd (TCW) – both just rebounding up
from a rising 40 week moving average – could be a low risk way to play.

Wednesday, April 16, 2014

As
usual I looked at the new 52 week high / low list for clues as to where the
money is going – and once again energy stocks dominate the TSX 52 week high
list.

ShawCor
Ltd (SCL) stands out for several reasons - it is also at an all-time high, it
is not well known, it is in the right space (energy infrastructure), the
technical picture is bullish with positive money flow and a youthful bull cycle
just underway. Even better – I don’t own it so my opinion is free of conflict
and self-serving bias.

Friday, April 11, 2014

I
always look at the new 52 week high / low list for clues as to where the money
is going – and in particular when we are in a corrective phase. Technically
there are a few rules that apply to the new 52-week high / low list – the most
important is the first new 52-week high will not be the last. So always seek
out stocks and ETFs that have made their first appearance on the new 52-week
high list such as the BMO Junior Oil Index ETF (ZJO) about 12 months ago at $20
(now $29)

Yesterday
out of a total of 23 new 52 week highs (TSX – excluding warrants and other
noise) there were 16 energy stocks – quite a message during a global sell-off
in he major stock indices. The money seems to be still going into the energy
stocks and in particular the gassy producers. Note the chart displaying two gassy
producers a weekly of Delphi Energy Corp. (DEE) plotted above Crocotta Energy
Inc. (CTA) – note that Delphi is leading
Crocotta by several months. Other gassy laggards are DTX, LRE, PPY, SRX, TLM,
TET, TBE and WCP – some homework suggested on these names.

Tuesday, April 8, 2014

According
to Elliottwave International Elliott waves often correct in terms of Fibonacci
ratios. They explain in their new eBook How You Can Use Fibonacci to Improve
Your Trading, which explains what you can expect when a market begins a
corrective phase. The classic Fibonacci retracement
percent number (%R) is 61.8% but 50% (not a Fibonacci #) is common.

Basically
a retracement is a correction that follows a meaningful advance – so in example
of the gold stocks we had a trough in late December 2013 – a subsequent advance
through to a mid March peak and then a sharp two week correction. When I look
at the TSX precious metal complex I observe that most miners have corrected –
or retraced about 50 per cent of the January 2014 through February advance.

Note
the chart displaying two baskets of junior gold miners – the BMO Junior Gold
Index ETF (ZJG) and the Market Vectors Junior Gold Miners ETF (GDXJ:US) with
both correcting (or retracing) about 62% of the December March advance –
opportunity now for those who missed the December March advance..

Friday, April 4, 2014

Last
night I was a presenter at the KWGC Region Chapter of the Canadian Society of
Technical Analysts (CSTA). I always enjoy speaking to my peers. The event was
well attended and my presentation focused on my experience as a sub-advisor to
the Union Securities Hybrid Portfolio Program – in particular how I used
technical analysis to select 5 companies that became the target of take-over
bids.

During
the Q & A period – I was asked for my views on the US stock market. I paused for a
moment and then said – correlation, there is too much sector correlation – the
high sector correlation has virtually stalled the healthy process of sector
rotation which now makes the S&P500 more volatile – and perhaps dangerous
over the short term.

Note
the chart displaying three sectors that in “healthy” markets operate somewhat inversely
– but that is not true to-day – we have different birds-of-a-feather flocking
together – eventually a condition with a bad outcome.

About Me

Bill has been writing a weekly business column in the Toronto Star since 1997, and was an early contributor to the former “Report on Business Television”. He has founded the Getting Technical Market Newsletter in December 1998.
Bill is also an Instructor for the Canadian Securities Institute. He is also a contributing author of the textbook for the technical analysis course offered by the Canadian Securities Institute (CSI. He is also called upon to provide training to industry professionals on technical analysis at many of Canada’s leading brokerage firms.
In February 2010 Bill became a technical sub-advisor to Stonebrooke Asset Management Ltd. who manages the Hybrid Investment Program under the Elite Wealth Strategies program for Union Securities Ltd..
The relationship ended in Feb 2012 but over the 24 month period the Hybrid Program enjoyed five technical selections that were the subject of takeover bids namely, Gerdau Ameristeel, El Paso Corp, Biovail Corp. Viterra Inc. and ShawCor Ltd